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Deutsche Post Ventures invests in US software

The $50M German corporate venture operation is looking to bolster the logistics services of its parent business Deutsche Post World Net.

Deutsche Post Ventures, the corporate venture arm of Deutsche Post World Net, the German corporation comprising mail, logistics and financial services, has led a £10m round of financing in Open Harbor, a US web-based trade services provider.

Mitsubishi International Corporation, New Enterprise Associatesand Alloy Ventures, which have already injected $17.5m, also committed, bringing the total investment in the company to around $29m.

Open Harbor, formerly MyCustoms, was founded in 1999 and seed funded with $1.5m from a consortium of angel investors including Michael Porter, a Harvard Business School professor and Eugene Fife, former chairman of Goldman Sachs International.

The money raised from the latest round of funding will be used to develop further the company’s product set and used on increased sales and marketing efforts.

Open Harbor develops software that automates the export/import documentation process. The software also enables disparate business units and supply chain partners to share shipment data and collaborate in real-time. Users of the service also have access to a constantly updated database that tracks changes in individual countries’ regulations.

Deutsche Post Ventures became interested in Open Harbor because of its technology, which is line with other logistics businesses the firm is looking to invest in, said Dr Martin Fritsch, managing director of the venture division. “The technology was of particular interest to Deutsche Post’s DHL Worldwide Express, which could use the software to smooth international trade,” he said.

“We expect to hold the company for several years and use it on broader basis because it is a great platform to bring to Europe.”

The market for automated transaction services is growing, especially in light of the terrorist attacks in New York in September, which have created more stringent export/import compliance requirements. “Increasingly international companies want to better their flow of goods across borders,” said Fritsch.

However Open Harbour faces tough competition in this market including the recently merged ClearCross and Atrion International as well as and Vastera, which recorded $54.8m in sales for 2000 and has a $450m market capitalisation.

Deutsche Post Ventures operates a $50m fund, of which half is already committed in four companies. Apart from Open Harbor, the group has invested in Viewlocity, a US supply chain management company, and Deltavista, an active credit and address management firm operating out of Switzerland and Austria. Last week the firm invested in MediaSec Technologies, a German/US company developing security products for documents including digital watermark authentication processes.

Digital watermarks are additional information embedded into sound, image or text files but which is not perceived by users, and can only be made apparent through use of a special software.

Established in 1999, MediaSec was spun out of the Fraunhofer Institute for Computer Graphics Research.